How many times have you started a strategic planning session with a ‘brain-storm’ to think up a bunch of projects that will form the basis of a three to five year plan? How many times have you been asked by the executive to come up with a ‘game-changer’ that will blow the competition away? How many times have you commissioned a strategic consultancy group to help identify a key strategic project? And as a result, how many times has that killer-project actually made a difference to the company bottom line?
It is all too easy to start strategic planning with a conversation that tries to figure out what initiatives to put in place to challenge a company to do better. But it really is putting the cart before the horse. You need to do things in the right order. A lasting strategy will never be built on the shifting sands of this year’s hot topic. For a strategy to endure (and succeed) it needs to be built upon a philosophy of continuous improvement. You need to look at what you have and determine how it will be improved over time. That may well include a radical change, but it must be viewed as a change that improves rather than a change for change sake.
Let us start by assuming a company Mission and Vision statements are already in place and therefore the overall general direction has been determined. Next come Strategic Objectives. Typically at this stage, projects will be identified. For example, a sales organisation may come up with a strategic objective to “Replace the CRM software with a new cloud based system”. Is this an objective? Well yes, but it is not a strategic objective. It tells us nothing about the real problem and how the project might contribute to the strategy. Furthermore, the only metric in place is the completion of the project. Just because a project has completed, does not mean it has or will make a difference.
If we dig a bit further into this example we may find that the sales people are actually quite happy with the software. What they really want is access while on the road. The improvement they require is to increase sales management productivity while away from the office. So the fundamental shift is to start with improvement objectives not initiatives. This will necessitate using a different sort of language when describing objectives. They should be defined as a continuous improvement activity. Typically a strategic objective will start with words like improve, increase, strengthen, decrease, reduce and enhance. These are all verbs that clearly describe an on-going activity.
There are two things that will be achieved by describing strategic objectives in this way. The first is an implicit requirement to describe how we measure the improvement, in other words to put in place a measurement or measurements. The second is that it ensures that if an initiative or project is put in place, it is for a good reason. That is to achieve a measurable strategic objective.
This sequence is crucial. It requires a great deal of discipline during the strategic planning process to stop the participants from running ahead and creating all sorts of initiatives that they honestly believe will ‘fix the problem’. Explaining the sequence – Vision to Objectives to Measures to Initiatives helps. However, the creative process should not be stifled. A good, and frequently used, method is the ‘parking lot’. That is, when an initiative is identified, write it on a large yellow sticky and place it in a highly visible area on the wall called ‘the parking lot’. The participant will be satisfied their idea will not be forgotten and will be picked up again in the latter stages of the process.
Remember: The only measures that can be applied to a project are; it has started, hit milestones and finished. Just because this has happened, does not mean and improvement has taken place. Initiatives need to be related to strategic objectives that have measures that determine success. Do things in the right order!
Take a look at our free guide to Developing Meaningful KPIs, it starts by looking at improvement objectives.
